-Long-Term Debt reduced by 20.3% to $135.53 million -Long-Term Debt Maturity Extended through October 2014 -Annual Interest Expense Reduced by $2.9 million
Merrimack, N.H. October 22, 2010– Brookstone announced the final details of its amended capital structure as a result of the successful completion of its offer to purchase or exchange its existing 2012 Notes. Brookstone’s long-term debt has been reduced by 20.3% to $135.53 million, and the maturity has been extended to 2014. In addition, Brookstone’s annual cash interest expense has been reduced by $2.9 million.
Brookstone previously announced that it had entered into an amended Senior Credit Facility that extended the term of the loan by four years with a final maturity in 2014.
Ron Boire, President and CEO commented “We are extremely pleased to have completed the purchase and exchange of the 2012 Notes. This exchange, together with the amendment to our Senior Credit Facility announced earlier this year, provides Brookstone with a more favorable capital structure and improved liquidity to allow us to grow our franchise and meet our long-term business aspirations”.
Mr. Boire continued “The $20 million of new capital contributed by the Sponsors and Management of Brookstone to purchase the 2012 Notes is a testament to the faith that we all have in Brookstone’s future. We are making significant progress in revitalizing Brookstone’s products, distribution channels, and people, all to realize the full potential of the Brookstone brand.”
Brookstone Company, Inc. announced that $160.076 million principal amount or 94.16% of its 12% Second Lien Senior Secured Notes due 2012 had been tendered by 5:00 p.m. New York City time on October 21, 2010 in response to Brookstone's offer to purchase 2012 Notes for cash (subject to possible proration) or acquire them in exchange for new 13% Second Lien Senior Secured Notes due 2014.
Brookstone had offered to purchase 2012 Notes for $975 in cash for each $1,000 of 2012 Notes that were tendered (up to a maximum of $20 million subject to pro-ration) or to issue 13% Second Lien Senior Secured Notes due 2014 in exchange for tendered 2012 Notes at the rate of $900 principal amount of 2014 Notes for each $1,000 principal amount of 2012 Notes.
As part of the offer, holders who tendered 2012 Notes consented to amendments to the indenture that governs the 2012 Notes that eliminated all the covenants and events of default, other than those regarding payment of principal and interest when it is due, and released the collateral for the 2012 Notes, and renamed the 2012 Notes “12% Unsecured Notes due 2012.” The assets that had formerly secured the 2012 Notes, which are substantially all the assets of Brookstone and its subsidiaries, will now secure the 2014 Notes.
Brookstone, Inc. is an innovative product development and specialty lifestyle retail company that operates 306 Brookstone Brand stores nationwide and in Puerto Rico. Typically located in high-traffic regional shopping malls and airports, the stores feature unique and innovative consumer products. The Company also operates a Direct Marketing business that includes the Brookstone catalog and an e-commerce website at http://www.brookstone.com.
Brookstone is principally owned by three sponsors, Osim International, J.W. Childs, and Temasek Holdings. In accordance with the terms governing its publicly-held debt, the Company issues quarterly and annual reports under SEC guidelines.
Statements in this release which are not historical facts, including statements about the Company's confidence or expectations, earnings, anticipated operations of its e-commerce sites and those of third-party service providers, and other statements about the Company's operational outlook are forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 ("Reform Act") and are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in such forward-looking statements. Such risks and uncertainties include, without limitation, risks of changing market conditions in the overall economy and the retail industry, consumer demand, the effectiveness of e-commerce technology and marketing efforts, availability of products, availability of adequate transportation of such products, and other factors detailed from time to time in the Company's annual and other reports posted to the Company’s website. Words such as "estimate", "project", "plan", "believe", "feel", "anticipate", "assume", "may", "will", "should" and similar words and phrases may identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date thereof. The Company undertakes no obligations to publicly release any revisions to these forward-looking statements or reflect events or circumstances after the date hereof.
Contacts: Brookstone, Inc. Philip Roizin, EVP, Operations and Chief Financial Officer (603) 880-9500